SPY: Market could have peaked

3 sept. 2020

The last bullish signal we had, has expired in the weekly timeframe, and many stocks started to collapse today. There's a chance support holds here if the market slows down the fall for a few hours and liquidity returns to markets, but, risk is very elevated. I've been exiting my remaining bullish positions, and have been long VIXY for a couple weeks already, now exposed to bearish positions in select names only. For the time being. I'm keen on buying value stocks if the opportunities present themselves again, but also keen on shorting overvalued stocks.

Bitcoin has taken a nosedive today as well, and triggered a weekly bearish signal in the money supply adjusted chart, as per my other publication. I urge you to be careful going forward, if the market hasn't peaked, which we will know for sure once we see liquidity return and VIX start dropping, the risk of being exposed on the long side is very high.
Charts give good low risk opportunities if one knows what to look for. This is a trader's market, investors might not fare well a long time.

Good luck,

Ivan Labrie.

3 sept. 2020

Commentaire

4 sept. 2020

Trade fermée manuellement

To be safe I took profit in my bearish positions today, near the lows. We got out of bearish trades in ETSY, XBI, long VIXY calls (which we bought when it was at $20 on August 29th), among other trades which resulted in a 2.77% return in little time.

We sit in cash, and await a buy opportunity in selected stocks.



It's possible that we form a multi week consolidation in stocks, before marching higher once again. Today's action doesn't seem like the start of a massive decline and investors have been heavily buying into puts as of late.

If so, we can expect further upside extending to the 2 month timeframe target, which sits near 4310.
To confirm this, we would need to hold here sideways for 6 weeks, and then break out of this range to the upside in SPY.

9 sept. 2020

Commentaire

Looking like a bottom:

9 sept. 2020

Commentaire

I anticipate a rally into October:

11 sept. 2020

Commentaire

I suspect we get yet another new all time high before collapsing here:
Red arrow would validate bullish momentum if we do break out, making it less likely that we are in a range bound market, and instead might commence a longer term bullish trend (this seems unlikely, but good to keep in mind the possibility, and the conditions that would validate that scenario).